Difference between Term Insurance and Whole Life Insurance
You may purchase both, a whole life insurance as well as a term insurance online. Before you do that, however, you should get an in-depth understanding of both these policies.
Whole life insurance
A whole life insurance policy, like its name suggests, is a life-long insurance protection plan that goes on until the policy is active. Apart from having an insurance benefit, this policy also has an investment benefit. In other words, it has cash value. Once enough money has been accumulated from the premiums paid towards your policy, you have access to that money in case you need it. However, the money you've borrowed from your policy is considered a loan that you need to repay. Failure to repay this amount reduces the policy's cash value as well as its death benefit.
Term life insurance
A term insurance policy is well suited to those who need insurance for a specific time frame only. It usually comes with a higher coverage. Since the premiums paid are lower, a term insurance is more feasible for those who cannot afford a life insurance policy. The policy nominee receives the death benefit upon your death if the policy is still on. This amount may be a lump sum or part lump sum and part installments. However, a term insurance policy has zero cash value. In other words, you receive no cash benefit whatsoever if the tenure of your policy is over and you are still alive.
Let us briefly understand the difference between a whole life insurance policy and a term insurance policy.
Whole Life Insurance
Term Life Insurance
Lasts life-long until policy is active
Lasts for a specified term only
Has cash value
Has no cash value
Good for someone looking for long-term insurance plus investment
Good for someone looking for short-term insurance with good coverage
Premiums are initially high but remain constant as time passes
Premiums go on increasing at each renewal point
Depending on your preferences, choose the one that suits you the best.
Today, you may buy term insurance and whole life insurance with just the click of a button. A fantastic option of buying term insurance online is the HDFC Life Click 2 Protect 3D Plus plan. It is an affordable plan that protects your family if the misfortune of disease, disability, or death befalls you. With a wide range of nine different plan options, this term insurance makes sure your family is well taken care of in your absence.
Related Article :
- Guide on How Term Insurance Remains Favourable Tax Saving Instrument Post GST
- Term Insurance and why it is important for everybody
- Can Term Insurance be Better Option than Life Insurance ?
- Pure Term Insurance Vs Return of Premium Vs Permanent Life Insurance
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